Some Missouri parents may be interested in setting up a trust to provide for their disabled children that will provide additional monetary assistance and not jeopardize Supplemental Security Income or other government benefits the child may receive. Parents and other family members may fund a special needs trust in several ways.
To establish the special needs trust, the grantor must first choose a trustee who is responsible to administer it correctly and honestly. This may be a family member, trusted friend or a financial institution. It is the trustee’s job to administer the funds according to the grantor’s wishes.
In most states, these types of trusts are used to supply supplemental needs, which may include transportation, education, durable medical equipment or dental and medical care not covered by government programs. However, limitations on trusts may be state-specific. Usually, special needs trusts may not be used for household expenses, such as housing costs or rent, groceries, taxes or insurance.
One benefit of a trust for a special needs child is that family and friends may also contribute. In addition to cash, trusts may be funded with proceeds from life insurance policies, property and Social Security and military benefits. In addition, certain investments and retirement funds may also be placed in the trust. Inheritances from other family members or friends may also be included.
Consulting with an attorney who specializes in structuring special needs trusts may be advisable. The attorney may offer assistance in establishing the duties of the trustee and offer advice concerning allowable uses of a special needs trust in Missouri. An attorney may offer insight into specific requirements and limitations of the special needs trust, tailoring it to the needs of the beneficiary while ensuring that it does not interfere with the government benefits to which the beneficiary may be entitled.
Source: PACER.org, “The Special Needs Trust“, October 19, 2014